Kim Dotcom: US “planted” evidence to obtain illegal search warrants

Megaupload says it kept infringing files—only because US ordered it to do so.

Megaupload has accused US investigators of "planting" evidence the government used to prove that Megaupload knowingly kept copyrighted files on its servers and ultimately shut the file-sharing site down. In a new brief, Megaupload argues that the key evidence being used against it—36 unauthorized copies of various movies—are files that the company kept specifically in order to satisfy the government's demands.

Megaupload's domain names were seized by the feds one year ago. In addition to the case against Megaupload founder Kim Dotcom, there is the case of innocent bystander Kyle Goodwin, who wants to regain the legitimate files he lost because of the Megaupload shutdown. The Goodwin case resulted in the unsealing of affidavits used to obtain the search warrants leading to the seizure of Megaupload domain names. Dotcom's legal team argued in a brief filed yesterday in United States v. Kim Dotcom (PDF) that the affidavits show the government "omitted critical, exculpatory information regarding whether, why and how Megaupload knew it was hosting criminally infringing files."

In the unsealed affidavits, government officials say they informed Megaupload in June 2010 that 39 infringing copies of copyrighted movies were on the servers Megaupload leased at Carpathia Hosting, and that Megaupload still had not removed 36 of them by November 2011, according to the Dotcom brief. This statement "appears in each relevant affidavit and is the only direct, corroborated evidence the Government purports to offer as proof that Megaupload had requisite knowledge" that it was hosting copyrighted content, the brief states.

The June 2010 event is from a separate case in which the government had a criminal search warrant apparently targeting a Megaupload user, and Megaupload says it was led to believe that it was not a target of that case itself. Government officials never communicated directly with Megaupload, "instead deputizing Carpathia to communicate on its behalf" because of "complex jurisdictional issues."

As for those 39 movies, Megaupload says it cooperated with Carpathia to supply the files to the government while preserving the files in their original condition so as not to tip off users to the investigation. Because the warrant was sealed, Megaupload was supposed to cooperate with Carpathia to comply with the warrant "without publicly opening a ticket as it normally would." Carpathia told Megaupload that it must move the infringing files to a disk so they could be passed on to the government, but did not specify whether the originals should be maintained.

"Megaupload's preservation of the status quo, particularly by not taking down or otherwise disturbing the files identified in the June 24, 2010 warrant, was faithful to the Government's express desire, reflected by the Magistrate Judge's order sealing the warrant… and by Carpathia's instructions on the Government's behalf, for Megaupload to ensure that evidence would remain preserved and that the target users would remain unaware of the investigation," the Dotcom brief states.

The brief then argues that the government used the June 2010 warrant to collect evidence against Megaupload in the ostensibly separate case that led to the January 2012 shutdown of the website:

Although it is now apparent that Megaupload, itself, was the target of a criminal investigation at the time it received the June 24, 2010 warrant from Carpathia, Megaupload was led to believe otherwise at this time. Indeed, it was steered to cooperate with the Government by Carpathia's express assurance that the Government had given it 'no reason to believe the [sic] MegaUpload is the target of the investigation.' By all indications, the Government tapped Carpathia to convey the June 24, 2010 warrant to Megaupload, thereby planting what the Government would later claim, for purposes of this case, amounted to criminal knowledge that Megaupload was hosting infringing files, while simultaneously lulling Megaupload into thinking it was not a target of its ongoing investigation … and, what is worse affirmatively leading Megaupload to understand from the warrant's sealing order and Carpathia's representations that Megaupload should take no action with respect to the infringing files lest it tip off the ostensible targets.

A separate warrant shows that the government's investigation into what it called the "Mega Conspiracy" began in March 2010. Although Megaupload speculates that the June 2010 warrant targeting one of its users was used deliberately to entrap Megaupload, it seems plausible that the cases were unrelated at the time.

An e-mail concerning the warrant that Carpathia's Philip Hedlund sent to Megaupload on June 25, 2010 shows the delicate balance Carpathia tried to strike, one that might satisfy both the government and one of its biggest customers. The e-mail does not tell Megaupload to keep infringing material, but also contains no request that Megaupload delete any files. The e-mail reads:

Please find attached a Search Warrant received by Carpathia today. Over the past days (since our return from our visit to you); Carpathia has been negotiating with the Government to avoid receiving a search warrant that could result in a seizure or imaging of the servers Carpathia provides to Mega. Instead, we've managed to convince the Government to issue this sealed (meaning we cannot disclose to anybody) warrant with an exception to disclose to you. Please know that we attempted to convince the Government to work directly with Mega on this matter, but given the complex jurisdictional issues, they have been unwilling. Nonetheless, Carpathia feels as if we've achieved a small victory by preventing the Government from issuing a search warrant giving them power to seize or image the servers themselves. Kim, we were able to do this specifically because we relayed to the Government Mega's willingness to work with the Government for these types of requests -just as we discussed during the last day of our visit (boy, am I happy we discussed it).

Carpathia needs your help collecting the information sought in this warrant so Carpathia can hand the information over to the Government. We have no reason to believe the MegaUpload is the target of the investigation. Mega's assistance in providing this information is the path most likely to avoid any disruption of services.

The e-mail then asks Megaupload to "move all the files" to a disk to be passed on to the government.

Separately, the warrants used to raid Dotcom's home in New Zealand have already been ruled illegal by a New Zealand judge. The US government's method of obtaining warrants "calls into grave question the legality of any and all seizures effected pursuant to those warrants," and is also relevant to Goodwin's request to get back his own files, the Dotcom brief from yesterday states. Dotcom's legal team stops short of asking the judge in the United States v. Dotcom to invalidate the warrants used to seize Megaupload domains, but asks for permission in future hearings to "address the validity" of the warrants and any related materials that might be unsealed in the future.

This article was corrected to better describe Carpathia's e-mail to Megaupload. Carpathia did not tell Megaupload that it must keep evidence related to the infringing movie files. Carpathia told Megaupload to provide the files to the government, but did not specify whether the original copies should be maintained or deleted.

Wow. Just.....wow. We always think that in this day and age, the government agencies that are created for and paid from the common good of the citizens are above criminal behaviour to perform their duties, and time after time the people are let down.

Cue up "Yakety Sax", because this case keeps taking turns toward the ludicrous. I truly expect to see Benny Hill himself, in a Keystone Kops uniform, no less, taking the stand for the DOJ.

Someone should burn for this, and their charred remains should be displayed in government buildings as a reminder that when you fawn over Hollywood lobbyists, you will inevitably look like a horse's arse at day's end.

EDIT: Be very careful about cuing up Yakety Sax, else you can expect a rapid lawsuit/criminal investigation. That shit's protected by copyright, y'know...

The worst part of all of this, many of the people responsible for carrying out this witch hunt will be getting new positions in the entertainment industry that pay a lot of money.

This might be part of the reason why the industry itself continues to operate as it does. Not saying that they do get nice jobs, but hiring people of this questionable ethical nature would seem to fit nicely with how they operate.

I don't get it, Mega was complicit in screwing over it's own "user"...? And therefore didn't realize it was the real target of the investigation? DotDum should be his name.

A company can not be held accountable for the actions for its users.

A company that hosts a file sharing service can be... read the safe harbor rules again.

And Megaupload had a DMCA takedown system, meaning they weren't responsible for them.

They are accused of not deleting files that should have been because of a takedown request. You don't find it fishy that the 36 files in question were required to be kept because of a prior investigation?

What's really messed up is that the system allows law enforcement to essentially bully companies into cooperate with investigations Carpathia basically got told 'cooperate with our investigation or we'll get a search warrant and seize the evidence massively disrupting your business in the process'.

Maybe that's why the telecoms cooperated with the warrantless wiretapping (back before it was legally required).

I don't get it, Mega was complicit in screwing over it's own "user"...? And therefore didn't realize it was the real target of the investigation? DotDum should be his name.

A company can not be held accountable for the actions for its users.

A company that hosts a file sharing service can be... read the safe harbor rules again.

And Megaupload had a DMCA takedown system, meaning they weren't responsible for them.

They are accused of not deleting files that should have been because of a takedown request. You don't find it fishy that the 36 files in question were required to be kept because of a prior investigation?

No I find it fishy he didn't delete them right off the bat, and decided to go along with the authorities....

I guess he went along with the warrant and not delete the infringing files because if he didn't then he would no doubt in trouble and face charges for obstructing that investigation. So by co operating with that investigation the government now accuses him of hosting those infringing files despite not mentioning that he was not to delete them because they were needed for evidence in that investigation. Screwed if you do and screwed if don't comply.

I don't get it, Mega was complicit in screwing over it's own "user"...? And therefore didn't realize it was the real target of the investigation? DotDum should be his name.

A company can not be held accountable for the actions for its users.

A company that hosts a file sharing service can be... read the safe harbor rules again.

And Megaupload had a DMCA takedown system, meaning they weren't responsible for them.

They are accused of not deleting files that should have been because of a takedown request. You don't find it fishy that the 36 files in question were required to be kept because of a prior investigation?

No I find it fishy he didn't delete them right off the bat, and decided to go along with the authorities....

In what way does that make sense?

1) Gov't says "We're investigating these files, hide but don't delete them"2) DMCA request(s) are also filed.3) Gov't pulls up a strangely familiar list of files, finds they still exist even though requests are filed, and dives after them in the most ridiculously unethical way I've seen this side of the secret police.

This happens, you think something is fishy here and it's not the government?

I don't get it, Mega was complicit in screwing over it's own "user"...? And therefore didn't realize it was the real target of the investigation? DotDum should be his name.

A company can not be held accountable for the actions for its users.

A company that hosts a file sharing service can be... read the safe harbor rules again.

And Megaupload had a DMCA takedown system, meaning they weren't responsible for them.

They are accused of not deleting files that should have been because of a takedown request. You don't find it fishy that the 36 files in question were required to be kept because of a prior investigation?

No I find it fishy he didn't delete them right off the bat, and decided to go along with the authorities....

Maybe because intentional destruction of evidence in a federal investigation is in itself a federal crime?

1) Gov't says "We're investigating these files, hide but don't delete them"2) DMCA request(s) are also filed.3) Gov't pulls up a strangely familiar list of files, finds they still exist even though requests are filed, and dives after them in the most ridiculously unethical way I've seen this side of the secret police.

This happens, you think something is fishy here and it's not the government?

Bingo. The gov't tells Mega, by way of a deputized Carpathia, to stop policing these files and ignore any DMCA takedown requests on them. Suddenly, Mega gets raided/shut down, and the lynchpin evidence against them turns out to be the files that they were preserving at the expressed request of the gov't.

Hi, Kim, Uncle Sam here. Yeah, we're gonna need you to ignore the law for a while, then we're gonna try to burn you down for ignoring that law. Cool? Thanks, bud :-)

Wait, hold up -- Dotcom isn't arguing that government agents actually uploaded copyright material to Megaupload's servers to incriminate him and the company, right? He's basically saying he was duped by the government into thinking that those 39 movies were for another case, and then they ended up being used against him in the Megaupload criminal complaint, correct?

So I'm confused -- Is Dotcom saying that because it had 'no reason to believe the [sic] MegaUpload is the target of the investigation,' then the authorities were basically entrapping him by NOT forcing him to remove those 39 movies? Well....I dunno about that. Dotcom seems like a smart enough guy -- did he really need to be told, 'Hey Kim, these movies are copyright protected so when this peripheral investigation is over, you should probably deleted them."?

It's certainly makes the government investigators in this case look incompetent and even sketchy, but as Jon states in the article, it's plausible the two cases were unrelated at the time and that agents probing Dotcom pulled records from past Megaupload cases, saw the records of the 39 movies in question, and then discovered in their criminal probe that those files were still sitting there months/years later.

And it's also plausible I'm just naive....

It would have been the government's responsibility to inform MU when the files were no longer needed and were safe to delete. Failing to do so would be incompetence. Deliberately refusing to do so would be fraud.

Wait, hold up -- Dotcom isn't arguing that government agents actually uploaded copyright material to Megaupload's servers to incriminate him and the company, right? He's basically saying he was duped by the government into thinking that those 39 movies were for another case, and then they ended up being used against him in the Megaupload criminal complaint, correct?

So I'm confused -- Is Dotcom saying that because it had 'no reason to believe the [sic] MegaUpload is the target of the investigation,' then the authorities were basically entrapping him by NOT forcing him to remove those 39 movies? Well....I dunno about that. Dotcom seems like a smart enough guy -- did he really need to be told, 'Hey Kim, these movies are copyright protected so when this peripheral investigation is over, you should probably deleted them."?

It's certainly makes the government investigators in this case look incompetent and even sketchy, but as Jon states in the article, it's plausible the two cases were unrelated at the time and that agents probing Dotcom pulled records from past Megaupload cases, saw the records of the 39 movies in question, and then discovered in their criminal probe that those files were still sitting there months/years later.

And it's also plausible I'm just naive....

It would have been the government's responsibility to inform MU when the files were no longer needed and were safe to delete. Failing to do so would be incompetence. Deliberately refusing to do so would be fraud.

Good point. I'm still puzzled by the conspiracy theories, though. Surely the authorities didn't need just these specific 39 movie files to prove their was massive amounts of infringing files on MU's servers, so it doesn't seem logical that the government would resort to this kind of plot to incriminate Dotcom when, good lord, you can go to plenty of forums and message boards and find plenty of links to movie/game/music files on MU. Really not that hard.

""Sorry you are speculating based off the author's own speculation. The fact of the matter was there was no warrant given directly to Mega Upload. And back to my original point, instead of ignoring a non existing warrant he decides to cooperate with the government to incriminate his own user? That's called being a rat and I'm surprised anyone would go through the lengths Ars users are to side with a RAT.""

I am not speculating. Megaupload was not served direct because they couldn't because of jurisdiction. Capathia was told by the government to act as a go between because the government refused to deal with Megaupload direct because of jurisdiction. Megaupload complied with the sealed warrant passed on by Carpathia in order to avoid having the servers seized etc. If Carpathia didn't co operate with the warrant also then the servers would have been seized. Megaupload could have told the government to go jump and had those files deleted and if they did then Carpathias servers would have been seized/copied.

It's not up to the authorities whether or not a file gets deleted Just because you are a cop doesn't mean you can skirt copyright law. That's why this whole thing stinks of BS.

You've watched way too many forced advertisements on DVD's if you think copyright law is even remotely that important. The alternative is tampering with evidence in a federal investigation, I would probably try to avoid doing that one first before I worry about copyright law.

Good point. I'm still puzzled by the conspiracy theories, though. Surely the authorities didn't need just these specific 39 movie files to prove their was massive amounts of infringing files on MU's servers, so it doesn't seem logical that the government would resort to this kind of plot to incriminate Dotcom when, good lord, you can go to plenty of forums and message boards and find plenty of links to movie/game/music files on MU. Really not that hard.

The thing that the DOJ needed, though, was some proof that Mega was ignoring legit takedown requests, which would take away their safe harbor. Suddenly, with these 36 files held in place despite logged DMCA takedown notices, they had that 'proof'.

Maybe the DOJ wasn't aware of the parallel investigations. Maybe. Even if they weren't, this shoots big, gaping holes in their portrayal of Mega as a willful enabler of infringement and a general scofflaw. Dotcom is far from an upstanding citizen, but no one deserves to be railroaded like he was.

Good point. I'm still puzzled by the conspiracy theories, though. Surely the authorities didn't need just these specific 39 movie files to prove their was massive amounts of infringing files on MU's servers, so it doesn't seem logical that the government would resort to this kind of plot to incriminate Dotcom when, good lord, you can go to plenty of forums and message boards and find plenty of links to movie/game/music files on MU. Really not that hard.

The thing that the DOJ needed, though, was some proof that Mega was ignoring legit takedown requests, which would take away their safe harbor. Suddenly, with these 36 files held in place despite logged DMCA takedown notices, they had that 'proof'.

Maybe the DOJ wasn't aware of the parallel investigations. Maybe. Even if they weren't, this shoots big, gaping holes in their portrayal of Mega as a willful enabler of infringement and a general scofflaw. Dotcom is far from an upstanding citizen, but no one deserves to be railroaded like he was.

I wonder if the DOJ will come out and say that they were not aware of the investigation that was taking place in June 2010 when they filed for there warrant in November 2011.

The worst part of all of this, many of the people responsible for carrying out this witch hunt will be getting new positions in the entertainment industry that pay a lot of money.

This might be part of the reason why the industry itself continues to operate as it does. Not saying that they do get nice jobs, but hiring people of this questionable ethical nature would seem to fit nicely with how they operate.

Typical bunch of asshole greedy Politicians.I watch em from the sidelines.They better hope we do not rise up someday.Millions of us are getting to hate this Government more and more.I say a big Fuck You to all the MAFIAA and an even bigger Fuck You to our 'Government.A real dysfunctional, corrupt, and greedy bunch of schmucks that ever lived.

Good point. I'm still puzzled by the conspiracy theories, though. Surely the authorities didn't need just these specific 39 movie files to prove their was massive amounts of infringing files on MU's servers, so it doesn't seem logical that the government would resort to this kind of plot to incriminate Dotcom when, good lord, you can go to plenty of forums and message boards and find plenty of links to movie/game/music files on MU. Really not that hard.

The thing is, if those massive amounts of infringing files were getting removed from the site and the files deleted when DMCA takedown requests were coming in then there is nothing to prosecute on the Megaupload side - they are complying with the law.